Exhibit 10.31


 


ADOPTED PLAN


 


EXCO
HOLDINGS INC.


 


EMPLOYEE
BONUS RETENTION PLAN


 


 


July 29,
2003


 

















 


SECTION 1


General


 


1.1                                 Purpose. 
This EXCO Holdings Inc. Employee Bonus Retention Plan (the “Plan”) is
established by the Board of Directors (the “Board”) of EXCO Holdings Inc. (the
“Company”) to promote the long-term financial interests of the Company by
providing certain employees of the Company and its Affiliates (as such term is
defined in the Stockholders’ Agreement dated as of the date hereof among the Company
and the stockholders of the Company listed on the signature pages attached
thereto) with an incentive to remain employed with the Company and its
Affiliates so they can continue to actively perform their job functions and
duties with full attention and dedication.


 


1.2                                 Plan Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in the Board.


 


1.3                                 Action
by the Company.  Any action required
or permitted to be taken by the Company under the Plan shall be by resolution
of its Board or by writing of a duly authorized officer of the Company.


 


1.4                                 Effective Date of Plan.  This Plan shall become effective on the
“Closing Date,” as defined in the Merger Agreement, dated March 11, 2003,
by and among EXCO Resources, Inc., EXCO Holdings Inc. and ER Acquisition, Inc.


 


SECTION 2


Participation


 


2.1                                 Participation.  The individuals listed on Exhibit A are eligible to participate
in the Plan (“Participant”).


 


SECTION 3


Retention
Bonus


 


3.1                                 Entitlement to and Payment of Retention Bonus.  Subject to the terms of Section 4 and 5
of the Plan, a Participant shall receive the Retention Bonus (as defined in
Section 3.2 below) as follows:  (i)
6.25% of the Retention Bonus, less applicable federal, state and local withholdings,
paid in cash, in a lump sum payment, within five (5) days after each three
month anniversary of the Closing Date until the date that is the four year
anniversary of the Closing Date; provided, however, that the unpaid Retention
Bonus payments, less applicable federal, state and local withholdings, shall be
paid in cash, in a lump sum payment, to a Participant upon the occurrence of
any of the events described in subsections (i)-(iii) of the definition of
Change of Control set forth in the Stock Repurchase Agreement of even date
herewith by and among the Company and the persons listed on the signature pages
attached thereto.  Except as otherwise
set forth in Section 4.1 below, a Participant must be employed with the
Company or one of its Affiliates at the time each portion of the bonus payments
are made to receive the Retention Bonus.


 

















 


3.2                                 Definition of Retention Bonus.  For purposes of this Plan, “Retention Bonus”
shall mean the amount listed on the Participation Agreement, attached hereto as
Exhibit B, for the Participant.


 


SECTION 4


Termination


 


4.1                                 Effect of Termination.  If a Participant terminates his/her
employment by voluntary resignation without Good Reason (as defined in
Section 4.3 below) or is terminated by the Company or any of its Affiliates
for Cause (as defined in Section 4.2 below), the Participant shall not be
entitled to receive any Retention Bonus payment or any portion thereof, not
already paid to the Participant as of the date of termination.  If a Participant terminates his/her
employment for Good Reason (as defined in Section 4.3 below), is
terminated by the Company or any of its Affiliates without Cause, or terminates
his/her employment as a result of death or Disability (as defined in
Section 4.4 below), the Participant shall continue to receive the unpaid
Retention Bonus payments in the manner set forth in Section 3.1, subject
to the terms of Section 5.


 


4.2                                 Cause. 
“Cause” shall mean the Participant’s (a) failure to substantially
perform his/her duties, provided that the Participant shall (to the extent such
failure is curable) have ten (10) business days after receipt of notice from
the Company or any of its Affiliates in writing specifying such failure to cure
the deficiency that would constitute “Cause”, (b) failure to follow the
reasonable directions of the President and Chief Executive Officer of the
Company or any of its Affiliates or the Board of the Company or any of its
Affiliates, provided that the Participant shall (to the extent such failure is
curable) have ten (10) business days after receipt of notice from the Company
or any of its Affiliates in writing specifying such failure to cure the
deficiency that would constitute “Cause”, (c) willful acts of dishonesty, theft
or fraud resulting or intending to result in personal gain or enrichment at the
expense of the Company or any of its Affiliates, (d) commission of a felony,
(e) engaging in any act that is intended, or may reasonably be expected to
materially harm the reputation, business or operations of the Company, any of
its Affiliates, or any member of the Company’s Board or any of its Affiliates
or (f) material breach of the Participant’s employment agreement or terms of
employment.


 


4.3                                 Termination for Good Reason.  “Good Reason” shall mean (1) a reduction in
base salary or any material agreed upon benefit without the Participant’s
consent; provided, that the Company or any of its Affiliates may at any time or
from time to time amend, modify, suspend or terminate any bonus, incentive
compensation or other benefit plan or program provided to the Participant for
any reason and without the Participant’s consent if such modification,
suspension or termination is consistent with modifications, suspensions or
terminations for other senior executive employees of the Company or any of its
Affiliates, (2) a material adverse reduction in the Participant’s
responsibilities, without his/her prior consent; provided, that,
a change in job title shall not be Good Reason and provided  further
that the Company or any of its Affiliates shall have thirty (30) days after
receipt of notice from the Participant to cure the deficiency that would result
in a termination with Good Reason or (3) relocation of Participant’s 


 


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principal place of employment outside of a 50 mile radius of its
location as of the effective date of the Plan set forth in Section 1.4
hereof.


 


4.4                                 Disability.  “Disability” shall mean a determination by the Company or any of
its Affiliates in accordance with applicable law that, as a result of a
physical or mental illness, the Participant is unable to perform the essential
functions of his or her job, with or without reasonable accommodation.


 


SECTION 5

Confidentiality and Non–Competition


 


5.1                                 Confidentiality and Non-Competition – General.  Any benefits payable under this Plan are
conditioned upon and subject to the terms of this Section 5.  To the extent that a Participant violates
any provision of this Section 5, the Company will have no further
obligation to provide any benefit or payment due hereunder, and will also have
any other remedies available to the Company for such violation including but
not limited to a preliminary injunction, temporary restraining order or other
equivalent relief.


 


5.2                                 Confidential Information.  The Participant agrees that:


 


(1)                                  Except as may be
required by law, by lawful judicial, governmental or regulatory authority, or
by lawful order of a court or agency of competent jurisdiction, or except to
the extent required to perform the Participant’s duties during the course of
his/her employment with the Company or any of its Affiliates, or to the extent
that the Participant has express written authorization from the Company, the
Participant at all times during and after employment with the Company or any of
its Affiliates (i) shall keep secret and confidential all Confidential
Information (as defined below), (ii) shall not disclose the same, either
directly or indirectly, to any other person, and (iii) shall not use it in any
way.


 


(2)                                  For purposes of this
Plan, the term “Confidential Information” means all non-public information
concerning the Company and its Affiliates that was acquired by or disclosed to
the Participant during the course of employment with the Company or any of its
Affiliates, or during the course of consultation with the Company or any of its
Affiliates following the Participant’s date of termination, including, without
limitation:


 


(i)                                     any non-public
information regarding the Company’s and its Affiliates’ customers, services,
processes, costs, operations and methods, whether past, current or planned, as
well as knowledge and data relating to business plans, marketing and sales
information originated, owned, controlled or possessed by the Company or its
Affiliates; and


 


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(ii)                                  information regarding
litigation and pending litigation involving or affecting the Company or its
Affiliates.


 


(3)                                  To the extent that
the Participant obtains information on behalf of the Company or any of its
Affiliates that may be subject to attorney-client privilege as to the Company’s
or its Affiliates’ attorneys, the Participant shall take reasonable steps to
maintain the confidentiality of such information and to preserve such
privilege.


 


(4)                                  The Participant
agrees that effective with the date of termination, the Participant will
deliver to the Company all papers, books, manuals, lists, correspondence,
documents, computer programs, computer spreadsheets, data captured on
machine-readable media, and other material containing or relating to the
Confidential Information, together with all copies thereof, that are in the
Participant’s possession or control, other than such materials as shall be
necessary to permit the Participant to prepare the Participant’s tax returns.


 


(5)                                  Nothing in this
Section 5.2 shall be construed so as to prevent the Participant from
using, in connection with his/her employment for himself or an employer other
than the Company or any of its Affiliates, knowledge that was acquired by
Participant during the course of his/her employment with the Company and its
Affiliates, and which is generally known to persons of his/her experience in
other companies in the same industry.


 


5.3                                 Noncompetition and Nonsolicitation.  Each Participant who becomes eligible for a
Retention Bonus under this Plan agrees as further consideration for such
benefit and in consideration of the receipt of Confidential Information from
the Company or any of its Affiliates, for the longer of (i) one (1) year after
the date of termination, or (ii) the period during which the Participant
receives Retention Bonus payments under Section 4.1, the Participant shall
not (i) to the extent Participant is listed on Exhibit A-1 hereto, be employed
by, or otherwise engage or be interested in, any business which is competitive
with any business of the Company or of any of its Affiliates in which the
Participant was engaged during his/her employment prior to his/her termination,
(ii) solicit, directly or indirectly, any prospective acquisition target of the
Company or its Affiliates, the knowledge of which was acquired by Participant
during the course of his/her employment with the Company and its Affiliates,
for the purpose of acquiring such prospective acquisition target or otherwise
providing such target any services or products offered by or available from the
Company or its Affiliates; or (iii) employ or solicit, directly or indirectly,
for employment any person who is an employee of the Company or any of its
Affiliates or who was an employee of the Company or any of its Affiliates at
any time during the 12 month period immediately prior to any such solicitation
or employment.  Notwithstanding the
foregoing, it is understood that the Participant may beneficially own
securities in any corporation whose securities are 


 


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publicly traded, provided that such ownership shall be less than two
(2%) percent of the equity securities of any such corporation.


 


SECTION 6


Amendment
or Termination


 


6.1                                 Amendment and Termination.  The Board may, from time to time, make
amendments to the Plan, and may terminate this Plan at any time; provided,
however that no such amendment shall have any adverse effect on the Retention
Bonus grants made as of the effective date of the Plan.


 


6.2                                 Successors.  The obligations of the Company under the Plan shall be binding
upon any assignee or successor in interest thereto.


 


SECTION 7


MISCELLANEOUS


 


7.1                                 Adjustment for Tax Effects.  If any payments or the value of any benefits
received or to be received by the Participant under this Plan, after taking
into account all other payments and all other benefits to which the Participant
is entitled, are subject to an excise tax under Section 4999 of the
Internal Revenue Code of 1986 (the “Code”) or any successor provision to that
Section, the payments and benefits to which the Participant is entitled under
this Plan shall be reduced to the extent required to avoid such excise
tax.  The Participant shall be entitled
to select the order in which payments are to be reduced in accordance with the
preceding sentence.


 


7.2                                 Mitigation and Set-Off.  No Participant shall be required to mitigate
the amount of any payment provided for in this Plan by seeking other employment
or otherwise.  The Company shall be
entitled to set off against the amounts payable to any Participant under this
Plan any amounts owed to the Company by the Participant, including, without
limitation, any amounts owed to the Company by the Participant under the terms
of any promissory note dated as of the date hereof executed by the Participant
but, subject to Section 5, above, shall not be entitled to set off against
the amounts payable to any Participant under this Plan any amounts earned by
the Participant in other employment after termination of the Participant’s
employment with the Company or any of its Affiliates, or any amount which might
have been earned by the Participant in other employment had he/she sought such
other employment.


 


7.3                                 Non-Alienation.  Participants shall not have any right to pledge, hypothecate,
anticipate or in any way create a lien upon any amounts provided under this
Plan; and no benefits payable hereunder shall be assignable in anticipation of
payment either by voluntary or involuntary acts or by operation of law.  Nothing in this Section shall limit a
Participant’s rights or powers to dispose of the Participant’s property by will
or limit any rights or powers which the Participant’s executor or administrator
would otherwise have.


 


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7.4                                 Withholding.  All payments to a Participant under this Plan will be subject to
all applicable withholding of state, local, provincial and federal taxes.


 


7.5                                 Source of Payments.  The obligations of the Company under the
Plan are solely contractual, and any amount payable under the terms of the Plan
shall be paid from the general assets of the Company or from one or more
trusts, the assets of which are subject to the claims of the Company’s general
creditors.


 


7.6                                 Notices. 
Any notice or document required to be given under the Plan shall be
considered to be given if actually delivered or mailed by certified mail,
postage prepaid, if to the Company, to 6500 Greenville Avenue, Suite 600,
Dallas, TX 75206 or, if to a Participant, at the last address of such
Participant filed with the Company.


 


7.7                                 Gender and Number.  Where the context permits, words in any
gender shall include any other gender, words in the singular shall include the
plural, and the plural shall include the singular.


 


7.8                                 No Right to Employment or Continuation of
Relationship.  Nothing in
this Plan shall confer upon or be construed as giving any Participant any right
to remain in the employ of the Company or any of its Affiliates.  The Company or any of its Affiliates may, at
any time, dismiss a Participant from employment free from any liability or any
claim except as expressly provided in this Plan.  No employee of the Company or any of its Affiliates shall have
any claim to be designated a Participant and there is no obligation for
uniformity of treatment of any employee of the Company or any of its
Affiliates.


 


7.9                                 Governing Law.  EXCEPT AS TO MATTERS RELATING TO THE INTERNAL AFFAIRS OF THE
COMPANY WHICH SHALL BE GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW, THE
VALIDITY, CONSTRUCTION AND EFFECT OF THIS PLAN AND ANY RULES AND REGULATIONS
RELATING TO THIS PLAN SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF AND WILL, TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR
PERFORMANCE IN THE CITY OF NEW YORK.


 


7.10                           Severability.  If any provision of this Plan is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or as to any individual
Participant, or would disqualify this Plan under any law deemed applicable by
the Board, such provision shall be construed or deemed amended to conform to
applicable law, or if it cannot be construed or deemed amended without, in the
sole determination of the Board, materially altering the intent of this Plan,
such provision shall be stricken as to such jurisdiction or Participant and the
remainder of this Plan shall remain in full force and effect.


 


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7.11                           No Limitation Upon the Rights of the Company.  This Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications, or
changes of its capital or business structure; to merge, convert or consolidate;
to dissolve or liquidate; or sell or transfer all or any part of its business
or assets.


 


7.12                           No Liability for Good Faith Determinations.  The members of the Board shall not be liable
for any action, failure to act, omission or determination taken or made in good
faith with respect to this Plan.  The
Board shall have the discretion, subject to the terms of Plan, to make
determinations and interpretations of the Plan which need not be the same with
respect to each Participant.


 


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ADOPTED PLAN


 


EXHIBIT A


 


List of Participants


 


 


	
  Name of

  Participant

  
	
  Douglas H. Miller

  
	
  T.W. Eubank

  
	
  J. Douglas Ramsey

  
	
  Charles R. Evans

  
	
  J. David Choisser

  
	
  Richard E. Miller

  
	
  James M. Perkins

  
	
  Richard L. Hodges

  
	
  John Jacobi

  
	
  Daniel Johnson

  
	
  Harold L. Hickey

  
	
  Stephen E. Puckett

  
	
  Russell Romoser

  
	
  Laurel A. Cocharo

  
	
  Jimmie L.Pulis

  
	
  Scott Studdard

  
	
  Paul Rudnicki

  
	
  Gary Nelson

  
	
  Gary Parker

  
	
  Wayne Gifford

  



 

















 


ADOPTED PLAN


 


EXHIBIT A-1


 


Douglas Miller


 


Ted Eubank


 

















 


ADOPTED PLAN


 


EXHIBIT B


 


PARTICIPATION AGREEMENT


 


You have been designated by the Board of
Directors as a Participant in the Employee Bonus Retention Plan (the “Plan”)
with the following Retention Bonus:


 


Name of
Participant: 


Position: 


Retention
Bonus: 


 


Your participation in the Plan is subject to
and in accordance with the express terms and conditions of the Plan.  In consideration of receipt of amounts under
the Plan and receipt of confidential information from the Company, you agree to
be bound by the terms and conditions of the Plan, including, but not limited
to, the non-competition and non-solicitation provisions in Section 5.3 of
the Plan, and acknowledge that you have received a copy of the Plan.


 


You also hereby acknowledge and agree that to
the extent the Plan conflicts with any provision of your Participation
Agreement the Plan shall control.


 


Capitalized terms not defined in this
Participation Agreement will have the same meanings assigned to them in the
Plan.


 


Dated as of July 29, 2003.


 


 


	
   

  	
  EXCO HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Douglas H. Miller, Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Participant:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed Name